The computer I’m on doesn’t even let me watch videos (this is on top of an incredibly outdated browser and no speakers – why does this place even have an IT department if they don’t do anything?? I’m digressing…). To be honest, I read your blog on my work breaks. I can’t see/hear the videos. Sure, I could go home after work and watch it… but once I go home I want to do something other than sit on a computer. So the chances of me actually watching this is slim vs. if you had a transcription or something of the video I’d be able to read it here at work and know what the video was about.

I think the first step is to lay it all out there….income, expenses, basically create a budget. If you don’t know where your money is going it can be tough to keep track of it and even realize you have a debt problem. If you are spending more than what you are making you are probably using credit to make up the difference. Pay down the highest interest debt first and so on until you are debt free. Expenses still too high? See where you can cut. And if you still can’t make it consider a part time or side job to knock out your debt.

Great suggestions, Suzanne. I agree that “laying it all out there” is the first *tangible* step to solving the problem. But I know firsthand it can be a big chore! Having that passionate, specific goal while give you the fuel to get over this inevitable hump!

Baker, this is spot on. It is definitely easy to say “I have a problem.” So what?! Why do you want to fix it? Even for my wife and I who for the most part have managed our finances well still need to remind ourselves why we are trying to pay off our debt.

Matt Gartland from Healthy Lifestyle Design hit on this in his ebook Fearless Health. He had a great graphic he let me put up in a review on the unconventional way to make decisions that is really effective. (http://www.joelrunyon.com/two3/the-power-of-why)

Keep your eye on the prize. The goal helps you stay focused, it’s important when paying down debt and maybe even more important after. You don’t want to fall back into habits that got you into a bad situation in the first place.

The first step has ALWAYS been “admit you have a problem,” with everything it seems. But what you’re saying makes 100% sense. I wonder how many alcoholics, gambling addicts, etc. would be helped if they applied some of this thinking (if they’re resistant to admitting their “problem.”)

Setting a goal is a good first step. Our goal was to pay off our debt so that my wife could stay home with our daughter after she was born. That was a huge goal and it kept us very motivated to pay off our debt and start living below our means.

It’s good to see you back posting.I’m subscribed by email.Sadly,I can’t watch the video.It must be a technical blooper.You asked what works for us.I just want you to know that your advice worked for us.We will have nearly $7,000 in our emergency fund on December 31.That is amazing to me!! We had to dip into it once this year.But we were so happy it was there.

You are 100% right about identifying your problem as the most important step. E.G, you can always try to help people get out of debt by giving them money, but eventually they will fall back into debt because of their spending habits. Unless, they can identify with the problem, people will never change.

I enjoy your blog, and this video really shares the enthusiasm you have for personal finance. But it was too extemporaneous, so it didn’t hold my attention beyond 2:30. That’s unfortunate, since that’s right around where you get to the meat of what you’re trying to tell us.

I hope you’ll turn the core content of this video into one of your blog posts. I wasn’t able to connect with the information you were trying to deliver: there seems to be a big gap between your writing (very well done, presumably with numerous drafts) and your video planning (too off-the-cuff for me).

Great post!
I’ve got some debt problems myself and I’ve done the practical steps about how to get rid of it. I’m doing ok, but fall back when times get tough. Attaching an emotional goal to my financial problem makes so much sense to help out when things get rough. Time to do some thinking… a sexy goal sounds pretty good too! hehehe

By the way, great blog Baker. I continuously follow it. Your posts have helped me tremendously to know how to tackle my debt problem!
Cheers,

Great post! For me, the first step would be to stop spending immediately and start tracking your expenses. I wrote a blog yesterday about “frugal” being the new F-word. I was surprised that it made it to WordPress’ front page (Freshly Pressed) and just how many people commented on how being frugal has made their lives better and richer (no pun intended!).

I actually use this method pretty regularly but never thought about it before. My wife and my goal is to move to Austin so we have been really focusing on paying off debt and growing our passive income. Thanks for the motivation video!

i’m curious but can’t stream the video. (one of the snags of living in a developing country.) maybe you could offer a hybrid post with both the video and some text for those of us who want to hear what you have to say but can’t do videos.

I think you hit the nail on the head! I was struggling with credit card debt for years and kept saying “I need to get out of debt”. Unfortunately, that was the extent of the goal. It wasn’t until I met my wife that I had a powerful emotional reason to push me to get out of debt. I set a goal for myself that I wouldn’t propose to her until I had paid off the last of my credit cards.

And that is what got me through the low times, the times where I was convinced I couldn’t ever finish off the debt. I kept reminding myself what it was I was working for, and it carried me through.

Thank you for the inspiring and wise words. I’m in the middle of my debt elimination journey and its a slow frustrating process. Thinking about what you’ve said, I think one of the reasons I got into debt in the first place was because I “didn’t” have a goal. Now that I’ve met someone that I want to build a life with, I feel even more driven to be debt free so that we can buy a home and start a family.